BMW South Africa has announced plans to expand to seven African countries in the next three to four years in a “structured” approach that will create a ready market for Rosslyn assembly plant in Pretoria.
Speaking after BMW Germany announced that the South African unit would take responsibility for distribution and marketing activities across the sub-Saharan region, CEO Tim Abbott said the automaker would initially concentrate on entering Nigeria, Senegal, Ivory Coast, Togo, Ghana, Kenya and Angola.
“Our plan over the next three or four years must be to create a structured sub-Saharan environment for BMW vehicles so that when the X3 is ready, so are the markets,” BDlive quoted Abbott saying.
The German carmaker invested $417 million in the South African plant in November last year. The assembler will start production of the newest model of its X3 sport-utility vehicle (SUV), replacing the 3-Series sedan that were built at the plant since 1983.
This would be the first time the X3 SUV will be produced outside the U.S., Bloomberg reported. It will also be the first time they are manufactures in Africa and exported across the continent.
Abbott said current African sales of new BMWs outside South Africa measured “in the low thousands”.
More than 80 percent of the BMW 3-series sedans built in Pretoria are exported to other parts of the world but almost none went to other African countries.
African markets are dominated by used cars from Asia. With the high levels of undocumented sale and dumping of used cars from developed countries in sub-Saharan Africa, it is difficult to determine the scale.
In recent years, several global motor companies have increasingly creates subsidiary in South Africa and using them as a base for exporting their vehicles into other African countries where car ownership is still low compared to other continents.
Some of these automakers include Ford, General Motors, Nissan and Toyota.
China’s fifth largest car manufacturer, Beijing Automotive, invested 11 billion rand for construction of new plant with a maximum annual capacity of 100 000 units in South Africa. The plant, which will be used to export vehicles to the rest of Africa, is expected to commence production by the end of 2017, IOL reported.
South Africa’s automotive-incentives have played a big part in attracting these companies to invest the country. The government promise in November last year to extend the benefits beyond 2020 is also expected to attract more global automakers.
BMW South Africa is also planning to re-export used right-hand-drive cars from South Africa cars to other countries on the continent and sell them through official dealerships.
Abbot said the company would work with existing importers across Africa to bring sales and after-service standards up to international BMW levels. It would also seek joint ventures with pan-African banks to offer vehicle financing to BMW customers.
He said the X3’s off-road capability and more robust design was more suited to African conditions and wanted the market to be ready for them when the Rosslyn plant begins rolling them out in 2019.
“With the X3, we believe we have a vehicle that resonates with these countries,” Abbott said in November.